PRINCIPLES OF ACCOUNTING FINAL EXAM
1. The Matching principle in accounting requires the matching of:
A: Revenue earned with the expenses incurred to produce revenue
B: Revenue earned with the liabilities used to produce the revenue
C: Revenue earned with the assets used to produce the revenue
D: Revenue earned with the assets used less the liabilities incurred.: a
2. Which of the following best defines a fiscal year?
A: The final 12 month period in the life of a business
B: Any consecutive 12 month period that a business adopts as its accounting
year
C: The first 12 month period in the life of a business
D: The 12 month period from January through December: B
3. Total revenues of 6,500, total expenses of 3,500 and dividends of 500 were
recorded for the month. What as the net income for this time period?
A: 3,500
B: 3,000
C: 2,500
D: 6,000: B
4. Which of the following accounts does no to onto the income statement?
A: Sales Revenue
B: Rent expense
C: Insurance expense
D: unearned revenue: D
5. The unadjusted trial balance for a prepaid rent shows a 12,000 balance. At
the end of this period, 7,000 rent has been used. The adjusted trial balance for
prepaid rent shows what balance?
A: 7,000 Debit
B: 5,000 Debit
C: 5,000 credit
D: 7,000 Credit: B
6. A company bought a two year insurance policy on Aug. 1st for 150 per
month. No adjustments have been made since then. What is the adjusting
entry of Dec. 31 of this year?
A: Debit prepaid insurance 150, Credit insurance expense 150
, PRINCIPLES OF ACCOUNTING FINAL EXAM
B: Debit insurance expense 750, credit prepaid insurance 750
C: Debit insurance expense 150, credit prepaid insurance 150
D: debit prepaid insurance 750, credit insurance expense 750: B
7. On the unadjusted trial balance, which accounts should have have their
balance listed in the debit column?
A: Liabilities, revenue, common stock
, PRINCIPLES OF ACCOUNTING FINAL EXAM
B: Assets, dividends, and expenses
C: Assets, revenues, and dividends
D: Liabilities, revenues, and dividends: B
8. Which of the following is a true statement regarding the unearned revenue
account?
A: Unearned revenue is accrued as the business provides goods or services
B: unearned revenue is expensed as the business provides goods or services
C: Unearned revenue decreases as the business provides goods or services
D: unearned revenue increases as the business provides goods or services: C
9. The account cash had a beginning balance of zero and the following
changes: increase of 250, decrease of 75, increase of 113, and a decrease of
35. The ending balance is a:
A: Credit balance of 253
B: Debit balance of 253
C: debit balance of 363
D: credit balance of 110: B
10. The general ledger is arranged in what order?
A: Chronological
B: normal credit balance accounts first
C: alphabetical order of the account names
D: account order: D
11. Jill invested 25,000 in her business. the journal entry (for the business)
would include a:
A: credit cash for 25,000 and a debit to common stock for 25,000
B: Debit cash for 25,000 and a credit to dividends for 25,000
C: debit to cash for 25,000 and a credit to common stock for 25,000
D: credit to cash for 25,000 and a debit to dividends for 25,000: C
12. What is the basic account equation?
A: Revenue minus expenses equal net income
B: Debits equal credits
C: Assets equal liabilities plus owners equity
D: Beginning retained earnings plus net income minus dividends equals
ending retained earnings: C
, PRINCIPLES OF ACCOUNTING FINAL EXAM
13. Respectively, cash, rent expense, and accounts payable are:
A: All permanent accounts
B: permanent, temporary, and temporary accounts
C: permanent, temporary, and permanent accounts
D: Temporary, permanent, and temporary accounts: C
1. The Matching principle in accounting requires the matching of:
A: Revenue earned with the expenses incurred to produce revenue
B: Revenue earned with the liabilities used to produce the revenue
C: Revenue earned with the assets used to produce the revenue
D: Revenue earned with the assets used less the liabilities incurred.: a
2. Which of the following best defines a fiscal year?
A: The final 12 month period in the life of a business
B: Any consecutive 12 month period that a business adopts as its accounting
year
C: The first 12 month period in the life of a business
D: The 12 month period from January through December: B
3. Total revenues of 6,500, total expenses of 3,500 and dividends of 500 were
recorded for the month. What as the net income for this time period?
A: 3,500
B: 3,000
C: 2,500
D: 6,000: B
4. Which of the following accounts does no to onto the income statement?
A: Sales Revenue
B: Rent expense
C: Insurance expense
D: unearned revenue: D
5. The unadjusted trial balance for a prepaid rent shows a 12,000 balance. At
the end of this period, 7,000 rent has been used. The adjusted trial balance for
prepaid rent shows what balance?
A: 7,000 Debit
B: 5,000 Debit
C: 5,000 credit
D: 7,000 Credit: B
6. A company bought a two year insurance policy on Aug. 1st for 150 per
month. No adjustments have been made since then. What is the adjusting
entry of Dec. 31 of this year?
A: Debit prepaid insurance 150, Credit insurance expense 150
, PRINCIPLES OF ACCOUNTING FINAL EXAM
B: Debit insurance expense 750, credit prepaid insurance 750
C: Debit insurance expense 150, credit prepaid insurance 150
D: debit prepaid insurance 750, credit insurance expense 750: B
7. On the unadjusted trial balance, which accounts should have have their
balance listed in the debit column?
A: Liabilities, revenue, common stock
, PRINCIPLES OF ACCOUNTING FINAL EXAM
B: Assets, dividends, and expenses
C: Assets, revenues, and dividends
D: Liabilities, revenues, and dividends: B
8. Which of the following is a true statement regarding the unearned revenue
account?
A: Unearned revenue is accrued as the business provides goods or services
B: unearned revenue is expensed as the business provides goods or services
C: Unearned revenue decreases as the business provides goods or services
D: unearned revenue increases as the business provides goods or services: C
9. The account cash had a beginning balance of zero and the following
changes: increase of 250, decrease of 75, increase of 113, and a decrease of
35. The ending balance is a:
A: Credit balance of 253
B: Debit balance of 253
C: debit balance of 363
D: credit balance of 110: B
10. The general ledger is arranged in what order?
A: Chronological
B: normal credit balance accounts first
C: alphabetical order of the account names
D: account order: D
11. Jill invested 25,000 in her business. the journal entry (for the business)
would include a:
A: credit cash for 25,000 and a debit to common stock for 25,000
B: Debit cash for 25,000 and a credit to dividends for 25,000
C: debit to cash for 25,000 and a credit to common stock for 25,000
D: credit to cash for 25,000 and a debit to dividends for 25,000: C
12. What is the basic account equation?
A: Revenue minus expenses equal net income
B: Debits equal credits
C: Assets equal liabilities plus owners equity
D: Beginning retained earnings plus net income minus dividends equals
ending retained earnings: C
, PRINCIPLES OF ACCOUNTING FINAL EXAM
13. Respectively, cash, rent expense, and accounts payable are:
A: All permanent accounts
B: permanent, temporary, and temporary accounts
C: permanent, temporary, and permanent accounts
D: Temporary, permanent, and temporary accounts: C
